Buy-to-let mortgage lender Paragon has launched the first new UK bank granted a licence this year.
Indeed, Paragon Bank is the first approved by the Prudential Regulatory Authority under its new lower capital regime for start-up banks launched last April. Paragon applied for a licence in July and it took just over six months to be granted.
Chief executive Nigel Torrington said: “The regulator sometimes gets a bad press but we have to say this was a very thorough but very good process.”
He added: “We prefer to see ourselves as a specialist bank rather than a challenger bank. We don’t want to take the High Street banks on at their own game. We are going into areas where we already have skills and can add value.”
Paragon Bank has recruited former ING Direct chief executive Richard Doe as its managing director. Its chairman is Stephen Blaney, who previously ran private bank Brown Shipley.
Paragon Group has provided the bank with an initial £12.7 million of capital — roughly its first year of lending and a year’s overheads — but this will rise as the bank grows.
It launched its first product today offering car loans through brokers and dealers. Savings will come in a couple of months and personal loans later this year.
The entire operation will be online with no branches.